THE Vatican has warned Britain that it risks violating a longstanding treaty by transferring its Embassy to the Holy See to premises within the British Embassy to Italy.

A team from the Foreign and Commonwealth Office is being sent to Rome this week in an attempt to avert a diplomatic row over the move, which the FCO insists is not a merger.

Cardinal Angelo Sodano, the Pope’s Secretary of State (Prime Minister), has notified London that under the 1929 Lateran Treaty between Italy and Vatican City, the Vatican has “sovereign status” and is entitled to foreign missions separate from Italy.

Francis Campbell, 35, the new British Ambassador to the Vatican, presented his credentials to Pope Benedict XVI just before Christmas.

Mr Campbell, a diplomat and international relations expert who has also worked for Amnesty International, was formerly a Downing Street adviser on Europe and is said to have “the Prime Minister’s ear”. He has also made history by becoming the first British Roman Catholic envoy to the Pope since the Reformation.

He is working, however, from offices within the British Embassy to Italy with a reduced staff after the closure of the offices of the Embassy to the Holy See on Via Condotti.

Mr Campbell still occupies Villa Drusiana, the official residence of British ambassadors to the Vatican, a rented villa near the Appian Way. But staff have been dismissed and the villa is to be handed back to its owners at the end of this month. The new Ambassador to the Holy See is due to move into a building in the grounds of Villa Wolkonsky, the residence of Sir Ivor Roberts, the Ambassador to Italy.

British officials insist that the missions to Italy and the Vatican remain juridically and administratively distinct. Vatican sources, however, argue that senior Holy See officials cannot be expected to go to Villa Wolkonsky.

The Lateran Treaty, signed in 1929 by Benito Mussolini, the Fascist dictator, and Cardinal Pietro Gasparri, Secretary of State to Pope Pius XI, settled the stand-off which followed the defeat of the papal states and the establishment of a united Italy in 1870. Britain agreed to support the treaty.

It “definitively” recognises the sovereignty of Vatican City and the Holy See’s right to have foreign embassies and legations accredited to it. Britain broke off diplomatic relations with the Holy See in 1534, but re-established them in 1914. Britain’s envoy was upgraded to ambassadorial rank in 1982.

The Holy See maintains diplomatic relations with 174 nations, 68 of which have “permanent resident diplomatic missions” accredited to the Vatican. The rest have missions outside Italy with dual accreditation. All major powers have separate missions to the Vatican and Italy. The Vatican fears that if Britain reduces its diplomatic representation, other countries may also be tempted to cut costs.

Vatican officials point out that Britain and the Vatican are engaged in a “vital dialogue” on issues from relations with Islam to development aid to Africa, as well as Anglican-Catholic rapprochement.

The Foreign Office has justified the closure of the Via Condotti offices and Villa Drusiana on cost-cutting and security grounds. The residence costs €10,000 (£6,860) a month to rent before the cost of security, housekeeping and gardening staff.

In a recent interview with The Times Mr Campbell defended the closure, saying that garden parties and other “19th-century” diplomatic methods were out of date. But the villa and its lovingly tended English-style garden have in the past been an effective and discreet setting for diplomatic and religious encounters.